We all know how important auto insurance is, but if you run a business, even a business where you are the sole employee, you need to have business insurance on your vehicle. This is because regular auto insurance doesn’t cover things like accidents when those accidents happen while you’re conducting your business. You need commercial auto insurance because only this type of coverage will pay for anything that might happen to your vehicle as you drive around running your business.
That said, there are also different types of car insurance for businesses, and below are the ones you should consider when purchasing auto insurance.
1. Liability Auto Insurance
This one is similar to personal liability insurance, as it covers damages to the other vehicle in the case of an accident where you are at fault. The difference, of course, is that it covers commercial vehicles instead of personal vehicles. It is especially important to have this type of insurance if you drive a truck and transport different goods and products across state lines. Even if you’re not a truck driver but still use your vehicle regularly for your business, liability should be the minimum coverage you purchase.
2. Property Damage Auto Insurance
Property damage covers expenses incurred by the other party when you are at fault, including coverage for things such as the person’s home, mailbox, flag pole, garage, fence, utility poles, parked cars in their driveway, and even pets. This type of commercial auto insurance can even cover your legal expenses if the other party decides to sue you for these damages. It does not cover your own property damages, and it does not include bodily injury coverage.
3. Bodily Injury Auto Insurance
If you get into an accident that is your fault and the other party is hurt or injured, bodily injury auto insurance will provide the coverage you need. It covers things such as doctor or hospital visits, prescription medications, rehabilitation, home health care, and even funerals and lost wages. It is an excellent type of auto insurance to have because you never know when it will be needed, especially since accidents can be severe or minor at any time.
4. Uninsured Motorists’ Auto Insurance
This type of insurance includes both bodily injury and property damage, and it covers the other party when that party is uninsured. Covered are things like hospital visits, doctor visits, prescription medications, therapy, and even funerals. Just like in your personal insurance, uninsured motorists’ insurance is split into two types and only covers the other party, not the person who took out the policy.
5. Personal Injury Protection (PIP) Auto Insurance
Personal injury protection insurance covers injuries to yourself or one of your employees that result from an auto accident in a commercial vehicle. It usually covers things such as medical bills, loss of income, and even certain household services. It is a type of commercial auto insurance designed to cover not just bodily injuries but also the inconveniences that usually go along with them. Also known as no-fault coverage, this type of insurance is only available in the dozen or so states known as no-fault states.
6. Physical Damage Auto Insurance
Simply put, physical damage insurance covers the costs of repairing your vehicle if it is damaged due to an accident. The insurance includes three types: collision, which pays for damages due to a collision, rollover, etc.; comprehensive, which covers damages not related to an accident, including theft, fire, inclement weather, or collision with animals; and fire and theft with combined additional coverage (CAC), which is also called limited comprehensive and usually involves heavy-duty trucks.
7. Underinsured Motorists’ Auto Insurance
This insurance is designed for coverage for the other party when they don’t have enough auto insurance or not enough to cover specific damages. Once again, it is divided into bodily injury and property damage coverage, with the former covering things such as medical and hospital bills and the latter covering damages to the vehicle itself. There is sometimes a fine line between underinsured and uninsured motorists’ coverage, but your agent can help you learn the differences between the two so that you can decide exactly what you need.
8. Medical Payments Auto Insurance
Medical payments auto insurance covers medical expenses even when you are at fault and not the other driver. Typically, it covers things such as funeral costs and hospital and ambulance bills. Suppose you or an employee are injured in a car accident while driving a commercial vehicle. In that case, even if you caused the accident, this type of insurance will cover medical expenses so that you can recuperate and heal. This is perhaps one of the most important types of commercial car insurance you can have, simply because it protects a very important person involved in the scenario—you (or your employee).